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Pennies or Bankruptcy, Detroit Tells Creditors

DETROIT—The city of Detroit told some debtholders on Friday they will have to accept pennies on the dollar or risk getting drawn into the largest U.S. municipal bankruptcy ever.

Kevyn Orr, the bankruptcy lawyer hired by Michigan Gov. Rick Snyder to lead the restructuring of Detroit's troubled finances, told representatives of the city's creditors that the city plans to stop making payments on some of its debts, starting with a $39.7 million payment that was due Friday, and won't make payments in the foreseeable future on...